On Monday, September 26, 2011 10:53:35 am ideasinc at ee.net wrote:
> Michel, I will dig up my review of her book and send it to you. Meanwhile,
> consider Jaimie Walton's review at
>http://www.monetary.org/review-of-ellen-browns-the-web-of-debt/2010/12>> Walton's criticism is close to my analysis. Yes, this a serious process
> Walton's analysis is a tight analysis and it is posted by the American
> Monetary Institute, which is well outside of the MMT zone. Once you have
> Walton's article come back and we can discuss it. It may take awhile to
> understand that it is neo-classical economics which is a cult. Looking
> from the outside it is easy to understand how MMT might be considered to
> be a cult. However, in exploring MMT/functional finance you will find that
> its standards of discourse are on a par with the best of scientific
> discourses. I will respond more fully to your concerns. To the ordinary
> citizen her material may seem provocative and vaguely progressive, and it
> is not, particularly not in a close analysis. \\
>> when you are ready I will respond further. Tadit
Hmmm... does your definition of 'tight' analysis mean 'done with clenched
sphincter' by any chance? Jamie's review seems kind of bullshit to me.
EB: The spiraling debt trap that has subjected financially-strapped people to
usurious interest charges for the use of something the lenders never had to
lend is a fraud on the borrowers.
JW: Brown is clearly saying here it is banks lending “the use of something
the lenders never had to lend” which “is a fraud” because people are made to
think they’re borrowing money that’s there to be lent.
I read this to mean that the interest is the fraud, not the lending. And sure
enough, Ellen is quoted again to say just this:
EB: What is wrong with the current system is not that money is advanced as
credit against the borrower’s promise to repay but that the interest on
this advance accrues to private banks that gave up nothing of their own to
earn it.
JW: Notice Brown has shifted her definition of the problem from the “fraud”
itself to the interest on the “fraud”.
The reviewer puts this in a section titled "Brown’s incredible U-turn", as if
she were contradicting herself. Seems more a case of Jamie not being able to
understand English. Just prior to that he uses some curious abbreviated
quoting:
JW: Brown turns around and starts ‘justifying’ the present unsustainable
(and unjust) debt-based money system, telling us it:
“… would be sorely missed if banks could no longer engage in it.” [p. 403]
Doesn't that read like Ellen is concerned about the banks ability to continue
financial rape? What she's talking about in the full paragraph is that people
would sorely miss the ability to use credit under a 100% reserve scheme and
that the state could issue credit cards.
JW: But her flawed argument misses the point entirely: it turns our
government into a banker, the ‘owner’ of our indebtedness, but does nothing to
change the ill effects caused by a debt-based money system.
It's been a while since I read the book, but I think the idea is that
having any interest go to government, where it can be used for public benefit,
is better than giving it to known parasites.
Then he goes on to say that Aristotle was smart because he knew money is an
abstract social construct, but Ellen is stupid because she treats money in
various, abstract ways. Here's how I read them:
1) A unit of exchange value - Let's trade things!
2) A record of exchange - Let's go meta and trade the trades!
3) Credit - We'll let people get some things when they don't have things.
Jamie thinks these are contradictory, but hey, that's what abstraction will do
for you. What's funny is that he only accepts the first as valid. The
abstract unit of value concept is the original sin of money, a bit of brain
damage that no form of currency can ever repair. To equate dissimilar things
is simply a lie of convenience and will always cause problems.
--Karl